Summary
ABF Freight System, the nation's fifth-largest LTL carrier, is seeking wage concessions from the Teamsters union to match the 15 percent givebacks obtained by YRC Worldwide, the nation's largest LTL carrier. But the Teamsters union is publicly denying that any concession talks are taking place.
Analysis
What we have here, ladies and gentlemen, is a failure to communicate.
One day after an online report in the Journal of Commerce reported that ABF Freight System was "deep in talks" with the Teamsters union on concessions to match the 15 percent wage giveback and pension freeze won earlier this year by YRC Worldwide, the Teamsters union issued a strongly worded statement that the union is "not having contract or concession discussions" with ABF.
The Teamsters cited the "erroneous media report" and since has contacted ABF to "demand that they correct the record."
What, in the name of Jimmy Hoffa, is going on here?
Posturing, that's what.
ABF, the largest operating unit of Arkansas Best Corp., doesn't want the proverbial uneven playing field to skew its finances as it competes with YRC with what it hopes will be a robust freight recovery after four years in the doldrums.
ABF already is at a cost and work-rule disadvantage with the large non-Teamsters regional carriers such as Con-way, Old Dominion Freight Line, Estes Express, New England Motor Freight and others.
The Teamsters, on the other hand, don't want to appear weak to its 60,000 or some remaining members in the freight sector. So the union doesn't want to appear that it is holding "secret talks" with ABF over wage and pension concessions.
A spokesman for ABF finally issued a statement saying there is "obviously a difference of opinion" as to what is going on. No kidding.
But what is going is as as difficult as trying to hide Hurricane Katrina's impact on the city of New Orleans.
Cutting through the fog and the code, here is what's going on:
1. YRC has obtained more than $1 billion in wage and benefit concessions as it tries to stay in business.
2. ABF, which directly competes in precisely the same business and has many of the same customers as YRC, wants some of that savings.
3. The union, which already has lost in excess of 500,000 jobs in the once-proud freight sector of the Teamsters, doesn't want to lose another 15,000 or so dues-paying members in freight.
4. The Teamsters at once have to appear strong to its members but realistic enough to know that relatively healthy ABF probably cannot survive with a cost structure that penalizes it for being profitable.
5. As a signor to the National Master Freight Agreement, ABF has every right to seek similar concessions that YRC has already obtained.
ABF is staying mum on its future course. Wisely, according to a company spokesman, it will no longer "debate those semantics" of the give-back talks.
That probably would have been a wiser thing that spouting off about those give-backs at a trade press conference before those concessions had been signed, sealed, delivered--and approved by the rank and file.
But, of course, putting the cart before the horse has never been out of vogue in the trucking industry.
Prediction: ABF Teamsters will approve a 10-to-15 percent wage giveback package by the end of the first quarter of 2010. Book it.
